Cairn India’s oil block in Barmer, Rajasthan, will continue to be the company’s mainstay both in revenue as well as output terms in fiscal year 2014.
The block has met its projected target of 200 million barrels since production started in August 29, 2009.
Currently, Rajasthan, produces over 195,000 barrels of oil equivalent a day (oil and some gas).
Oil industry trackers see production in the fourth quarter of fiscal year 2014 growing at an average of 1.8 per cent quarter-on-quarter, as the company has achieved its exit production guidance of 200 million barrels.
Higher production also means that the country’s oil import bill will come down, to some extent.
Those tracking the industry say that any increase in output is good for the country, as almost 80 per cent of India’s crude oil requirement is met through imports.
Domestic refiners imported 1,89,635 million tonnes in fiscal year 2014.
In revenue terms, India’s import bill stood at ₹8,71,016 crore for the period.
Impact on Q4 According to sources in the know of developments, during the fourth quarter of fiscal year 2014,
Cairn India’s average gross operated production — from all its assets, including Rajasthan — could be almost 11 per cent higher, at 224,429 barrels of oil equivalent a day (oil plus some gas), driven primarily by the production ramp-up in Rajasthan. Dhaval Joshi, Research Analyst at Emkay Global Financial Services, told Business Line that while the benefit of crude oil prices and the rupee exchange may not play any major role in quarterly profitability numbers as there was hardly any change in both the variables, production growth will certainly play a key role. “The key thing for Cairn India’s stock price performance in coming quarters is production guidance over the next three years, which is expected to be announced by the management in the fourth quarter results (on April 23).
“This will indicate the reserves potential or possible upgrades in the Rajasthan block in the near term, which we believe is the key trigger for the stock price performance,” Joshi said.
New wells In the third quarter, the average gross operated production and working interest production were 11 per cent and 13 per cent higher at 224,429 barrels of oil equivalent a day (boepd) and 142,796 boepd, respectively, driven primarily by the production ramp-up in Rajasthan.
In Rajasthan, infill drilling (adding new wells in an existing field) continues across all major fields and has driven a 13 per cent increase in the production rate to 190,881 boepd.
Cairn India reported an average gross production of 218,651 boepd, for FY-2014, 6 per cent higher than the previous year.